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Oil prices, decontrol hoist cost of air travel

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Americans are starting to pay more for air fares as jet fuel costs skyrocket and discounts dip, but there will be fewer restrictions on remaining discounts. This is the conclusion of airline industry experts and Civil Aeronautics Board (CAB) spokesmen as air carriers launch a new round of fare increases.

With gigantic gasoline price increases widely forecast for this spring -- some of which have already begun to surface at the pump in the last few days -- many more vacationers may forsake their autos for air travel, says the American Society of Travel Agents. And the airline industry, too, is projecting a resurgence in the wake of a lackluster 1980 season -- when many carriers lost money.

"Airfares are going to be a victim like everuthing else of soaring fuel costs ," says Daniel Henkin, vice-president of the Air Transport Association which represents 26 airlines.

His words are underscored by his association's formal petition to the CAB last week to raise ticket prices by as much as 3.8 percent. And on March 1, the CAB is expected to set a still higher maximum allowable ticket price ceiling. Air Transport Association spokesmen say jet fuel prices have been dealt the twin blow of OPEC's crude oil price increase in December and President Reagan's recent decontrol of domestic crude oil.

Paradoxically, huge increases in jet fuel prices come at a time when stocks of jet fuel are at near record levels. Production last week was nearly 2 million barrels a day more than the same time last year, according to US Energy Department figures.

Last week, jet fuel stocks in primary storage -- defined as at refiners and in pipelines -- stood at more than 33 million barrels, says DOE jet fuel expert Keith Bauen. "The oil companies have been holding back on jet fuel price increases because of the abundant supplies," he continued. Supplies were higher than ever up until three weeks ago."


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